Jack In The Box 2012 Annual Report Download - page 27

We generally reinvest available cash flows from operations to develop new restaurants or enhance existing restaurants, to reduce debt and to repurchase
shares of our common stock. Our cash requirements consist principally of:
•working capital;
•capital expenditures for new restaurant construction and restaurant renovations;
•income tax payments;
•debt service requirements; and
•obligations related to our benefit plans.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with other financing alternatives in
place or available, will be sufficient to meet our capital expenditure, working capital and debt service requirements for the foreseeable future.
As is common in the restaurant industry, we maintain relatively low levels of accounts receivable and inventories and our vendors grant trade credit for
purchases such as food and supplies. We also continually invest in our business through the addition of new units and refurbishment of existing units, which
are reflected as long-term assets and not as part of working capital. As a result, we may at times maintain current liabilities in excess of current assets, which
results in a working capital deficit.
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The table below summarizes our cash flows from operating, investing and financing activities for each of the past three fiscal years ( in thousands):

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Total cash provided by (used in):
Operating activities
$136,730
$124,260
$61,866
Investing activities
(81,516)
(35,802)
19,173
Financing activities
(58,169)
(87,641)
(123,434)
Increase (decrease) in cash and cash equivalents
$(2,955)
$ 817
$(42,395)
. Operating cash flows increased $12.5 million in 2012 compared with 2011 due primarily to reductions in payments for income
taxes ($11.8 million), an increase in minimum rent receipts from franchisees attributable to the timing of collections for October rents ( $13.9 million) as well
as an increase in net income adjusted for non-cash items ($19.6 million). The impact of these increases in cash flows were partially offset by an increase in
payments for property rent related to fluctuations in the timing of payments for the month of October ( $19.0 million) and pension contributions ($15.5
million).
In 2011, operating cash flows increased $62.4 million compared with 2010 due primarily to reductions in payments for the following: advertising due to a
decrease in the number of company-operated restaurants ($30.3 million), income taxes ($33.2 million), property rent related to fluctuations in the timing of
payments for the month of October ($25.0 million), pension contributions ($19.3 million) and bonuses ($13.6 million). The impact of these payment
reductions were partially offset by a $20.6 million decrease in net income adjusted for non-cash items, a decrease in beverage incentives received resulting
from a decline in the number of company-operated restaurants ($7.2 million) and a decrease in minimum rent receipts from franchisees attributable to the
timing of collections for October rents ($10.7 million). Refer to the Results of Operations section of our MD&A for a discussion of factors leading to the
changes in cash net income.
. Cash flows used in investing activities increased $45.7 million in 2012 compared with 2011 due primarily to lower proceeds from
the sale of Jack in the Box restaurants to franchisees and collections of notes receivable related to prior years’ refranchising activities, as well as an increase in
cash used to acquire Qdoba franchise-operated restaurants. The impact of these decreases in cash flows were partially offset by a decrease in capital
expenditures. In 2011, cash flows used in investing activities increased $55.0 million compared with 2010 due primarily to an increase in capital
expenditures, lower proceeds from assets held for sale and leaseback and an increase in cash used to acquire Qdoba franchise-operated restaurants, partially
offset by an increase in proceeds from the sale of Jack in the Box restaurants to franchisees and collections of notes receivables related to prior years’
refranchising activity.
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